SEMA News—April 2011


  Steve McDonald 
By Steve McDonald

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

State Update

Arizona Emissions Test Exemption:


Consumer Rebates Available for Installation of Running Boards

Many automakers provide consumer rebates to help seniors install running boards when purchasing a new vehicle. The rebates may range up to $1,000 or even $1,200 for certain vehicle models based on a doctor’s prescription and appropriate paperwork. Each manufacturer has its own program. The National Mobility Equipment Dealers Association (NMEDA) has compiled a list of participating manufacturers with links to the individual programs. For more information on what rebates are available, visit

A SEMA-supported bill has been introduced in Arizona to exempt all vehicles more than 25 years old, without condition, from the state’s mandatory biennial emissions inspection and maintenance program. Existing law in Arizona only exempts pre-’67 model year vehicles and those vehicles designated as “collectible,” which are used primarily for hobby activities, insured under a collector car insurance policy and whose owners have registered an additional vehicle for general transportation.

Arkansas Inoperable Vehicles:

SEMA is opposing Arkansas legislation that would allow cities to remove inoperable vehicles from private property if the vehicle is deemed a “nuisance” under a local ordinance. The bill provides no reasonable safeguards for legitimate automotive hobbyists that choose to work on inoperable collector vehicles on private property and establishes no provisions that would enable vehicles located out of public view to avoid being classified as abandoned.

Connecticut Emissions Inspections:

Legislation has been introduced in Connecticut to extend the emissions inspection exemption to vehicles five model years old or newer. Current law exempts vehicles that are four model years old or newer. The measure acknowledges that it is senseless to test newer vehicles, the results of which demonstrate no significant air quality benefits. The idea behind exempting any class of vehicles is to reduce costs while not losing appreciable emissions reductions. This strategy builds support for emissions inspection programs but also directs finite resources to where they will be most valuable in cleaning the air.

Iowa Antique Motor Vehicles:

    A SEMA-supported bill has been reintroduced in Iowa to allow ’64 or older motor vehicles to be registered as “limited-mileage” antique vehicles for an annual fee of $10 
A SEMA-supported bill has been reintroduced in Iowa to allow ’64 or older motor vehicles to be registered as “limited-mileage” antique vehicles for an annual fee of $10. Vehicle owners taking advantage of this registration class are permitted to drive these vehicles up to 2,500 miles annually. Currently, antique vehicles undergoing the registration process in Iowa for the first time are required to pay an annual $50 registration fee. The bill also allows the owner of a “limited mileage” antique vehicle to display authentic model-year registration plates that are registered with the department as the vehicle’s current and valid registration plates.

Maine Aftermarket Exhaust Systems:

In 2003, a version of SEMA-model legislation to create an enforceable motor-vehicle exhaust noise standard was signed into law in Maine. Prior to 2003, Maine deemed illegal all modifications that increased noise levels above that emitted by the vehicle’s original muffler. Under the SEMA model, an exhaust system modification is legal if it results in a sound level of 95 decibels or less as measured by the Society of Automotive Engineers (SAE) test standard J1169. Last year, the law was again amended to clarify the statutory language and to require the Department of Public Safety to convene a working group to study issues relating to all road noise, including noise created when an exhaust system is not properly installed or maintained or is altered. In its recommendations to the Joint Standing Committee on Transportation, the group indicated that recent efforts have resulted in reducing road noise and has urged that monitoring be undertaken as well as educational efforts by the stakeholders before any additional measures are considered to further restrict the installation of aftermarket exhaust systems.

Maryland Specially Constructed Vehicles:

    A version of SEMA-model legislation to create a vehicle titling and registration classification for specially constructed vehicles, including kits and replicas, has been introduced in Maryland.  
A version of SEMA-model legislation to create a vehicle titling and registration classification for specially constructed vehicles, including kits and replicas, has been introduced in Maryland. The bill defines a specially constructed vehicle as a vehicle that was constructed from any combination of new or used parts; was not originally constructed by a generally recognized vehicle manufacturer; and has not been materially altered. The measure allows for the use of non-original materials, exempts specially constructed vehicles from standard equipment requirements and emissions inspections and provides for special license plates for these vehicles.

New York “Gas Guzzlers”:

In another misguided attempt to reduce greenhouse gas emissions, legislation has been reintroduced in New York to establish a progressive purchase surcharge for some new motor vehicles based on state calculations of carbon emissions. Depending on the vehicle purchased, this surcharge could require owners to pay up to $2,500 more for the vehicle. Funds collected under the program would be used in part to fund discounts for hybrids and electric cars. If this effort is successful, the effects on a consumers’ ability to purchase the vehicle of choice, not to mention vehicle safety, would
be dramatic.

New York Historic Vehicles:

SEMA-supported legislation has been reintroduced in New York to provide that historical vehicle owners only pay a one-time registration fee of $100 upon initial registration. The reduced registration fee would be available to owners of historical vehicles owned and operated as an exhibition piece or collector’s item and used for club activities, exhibits, tours, parades, occasional transportation and similar uses. Under current New York law, a historical motor vehicle is either a vehicle manufactured more than 25 years ago or one which has unique characteristics and which is determined to be of historical, classic or exhibition value. The $100 one-time fee would replace the current annual fee of $28.75.

North Dakota Vehicle Modifications:

A bill has been introduced in North Dakota to prohibit the modification of any motor vehicle that alters the manufacturer’s original suspension, steering or brake system unless the state highway patrol issues an inspection certificate. Current law permits modification if the equipment meets “SEMA standards.” The bill adds that modifying equipment may also meet Federal Motor Vehicle Safety Standards (FMVSS). Among other things, the bill also would require fenders on all motor vehicles. In a letter to the committee, SEMA informed legislators that SEMA does not set standards. Further, the National Highway Traffic Safety Administration only issues FMVSS to regulate equipment that is required on all new motor vehicles. An aftermarket part may only be regulated if it takes a vehicle out-of-compliance with a required piece of safety equipment when installed.

Texas Street Rods/Customs:

SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles has been reintroduced in Texas. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The measure also allows for the use of non-original materials and creates a titling and registration criterion that assigns these vehicles the same model year designation as the production vehicle they most closely resemble.

Washington State Registration Fees:

SEMA-opposed legislation to require annual renewal fees for collector vehicle and horseless carriage license plates will not receive committee consideration this year. Under the bill, the initial $35 license plate fee for these vehicles would have remained and a new annual $30 renewal fee would have been added. Under Washington law, a collector vehicle is any motor vehicle that is more than 30 years old, while a horseless carriage is defined as a vehicle that is more than 40 years old.

Washington Inoperable Vehicles:

SEMA-model legislation has been reintroduced in Washington state to prohibit cities or towns from enforcing an ordinance, development regulation, zoning regulation or administrative practice that prevents automobile collectors from pursuing their hobby. Junked, wrecked or inoperable vehicles, including parts cars, stored on private property would only require screening from public view if required by local law.

Washington Street Rods/Customs:

SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been introduced in the Washington State Legislature. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. Under the bill, kit cars and replica vehicles will be assigned a certificate of title bearing the same model-year designation as the production vehicle they most closely resemble. The measure also exempts street rods and customs from a range of standard equipment requirements (only that equipment required in the model year that the vehicle resembles) and emissions inspections.

West Virginia Exhaust Systems:

SEMA-model legislation that would allow vehicle hobbyists to install and use aftermarket modified exhaust systems that meet a 95-decibel limit under a fair and predictable test was introduced in West Virginia. Current state law only allows a muffler originally installed by the manufacturer or an equivalent. Among other things, the bill would remedy the enforcement policy currently used by police officers in which nearly all exhaust system modifications are considered illegal, even where noise levels are not excessive or unusual. Meanwhile, a bill to provide that the noise from a motor-vehicle exhaust system that has been deemed “disturbing or unreasonably loud” constitutes the crime of disturbing the peace has been reintroduced for consideration in West Virginia. Under the bill, violators could be fined up to $1,000 per occurrence, jailed for six months or both.

West Virginia Antique Motor Vehicles:

Identical bills in the West Virginia Legislature to provide owners of antique motor vehicles with a fair and equitable personal property tax assessment have been introduced. The bills seek to address recent unfair valuation practices which have negatively impacted many hobbyists. West Virginia law defines an “antique motor vehicle” to mean any motor vehicle which is more than 25 years old and owned solely as a collector’s item. Both measures provide that for the purposes of the property tax, the assessed value of an antique vehicle cannot exceed $200.

Federal Update

1099 Reporting Rule:

President Obama has called on Congress to eliminate the costly 1099 reporting requirement from the health care law. Removing the mandate is a top SEMA priority. The rule will require businesses to issue 1099 forms to all vendors from whom they buy more than $600 of goods or services in any year, beginning in 2012. Democrat and Republican leaders in both the House and Senate support the repeal effort. The only stumbling block to eliminating the provision is finding an offset to recoup lost revenues. The requirement was intended to prompt vendors receiving 1099 forms to declare and pay taxes on the income.

SEMA contends that it will fail to collect much under-reported income, but it will succeed in punishing small-business taxpayers that already comply with U.S. tax law.

Regulatory Review:

President Obama issued an Executive Order directing all federal agencies to review their regulations in an attempt to eliminate rules that hinder economic growth. In Congress, Rep. Darrell Issa (R-CA), the new Chairman of the House Oversight Committee, has asked the business community, trade groups and research organizations to identify federal regulations that are restraining the nation’s economic recovery. In the coming months, House leaders will schedule committee hearings to review various regulations. There have already been two actions in response to the Executive Order. OSHA has rescinded a proposed rule to require businesses to install soundproofing and make other workplace changes before relying on ear plugs to comply with noise standards. It also rescinded a proposal to require employers to record repetitive-motion injuries. 

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